USD/CAD Forecast May 10-14 – Canadian Dollar Sparkles But Job Numbers Sink

The Canadian dollar recorded another strong week, with gains of 1.26%. USD/CAD dropped to its lowest level since September 2017, as the pair ended the week slightly above the 1.21 level. There is just one economic release in the upcoming week. Here is an outlook for the highlights and an updated technical analysis for USD/CAD.

Canada’s manufacturing sector remains robust, as Manufacturing PMI for April posted a reading of 57.2. Although this was slightly lower than the previous reading of 58.5, it still points to strong growth.

Canada posted disappointing numbers on Friday. Employment numbers for May were much worse than expected. The economy shed 207.1 thousand jobs, compared to the consensus of a loss of 160.5 thousand. Unemployment jumped to 8.1%, up from 7.5% and above the forecast of 7.8%. The Ivey PMI fell to 60.2 in April, down sharply from 72.9 and shy of the estimate of 67.0. Despite these soft numbers, the Canadian dollar posted gains on Friday.

In the US, manufacturing activity grew at a slower pace in April, as the ISM Manufacturing PMI dropped to 60.7, down from 64.7. It was a similar story for business activity, as the ISM Services PMI slowed to 62.7, down from 63.7. Both PMIs missed their estimates.

The market was ready to celebrate a massive nonfarm payroll report for April, with an estimate of 990 thousand. Some analysts had even predicted a print of two million, but in the end, the economy created just 266 thousand jobs. Unemployment rose to 6.1%, up from 5.8% and above the estimate of 6.0%. There was a silver lining, as wage growth climbed 0.7%, rebounding from -0.1% and above the forecast of 0.0%.

USD/CAD daily graph with resistance and support lines on it. Click to enlarge:

  1. Manufacturing Sales: Friday, 12:30. Manufacturing sales took a downturn in February, with a read of -1.6%. Will we see an improvement in the March data?

Technical Analysis for USD/CAD

Technical lines from top to bottom:

1 2
View single page >> |
How did you like this article? Let us know so we can better customize your reading experience.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.